The Australian dollar is higher after US politicians reached a deal to roll back a series of measures that threatened to push America back into recession -- a situation known as the fiscal cliff.
At 07:00 AEDT, the local unit was trading at $US1.0392, up from $US1.0383 on New Year's Eve on Monday.
The Australian dollar peaked at $US1.0411 on Monday night, its highest level since Christmas Day.
The White House and senior Republicans struck the deal in 11th-hour negotiations to avert the tax hikes and postpone automatic spending cuts.
The bill has passed the Senate and is yet to be approved by the Republican-controlled House of Representatives.
The bill missed the midnight deadline on January 31, but BK Asset Management director Kathy Lien said it shouldn't matter as markets in the US are closed on January 1.
"The US economy will fall off the fiscal cliff but the price action in the financial markets suggests that investors aren't worried," Ms Lien said from New York.
"Investors are willing to grant Washington a few days extension especially with markets closed on Tuesday.
"One or two extra days won't make a difference especially since tax hikes will be felt gradually."